Our Mission

Our research aims to enhance the transparency and effectiveness of Web3 grant programs by providing a robust tool for self-assessment and benchmarking. The Grant Maturity Index (GMI) will enable grant operators to better understand their program's maturity, identify areas for improvement, and enhance their overall impact. The insights from our research will feed directly into a tool designed to demonstrate and improve the effectiveness of grant programs.

Our research methodology tracks the maturity of Web3 grant programs over time and compares their fitness for purpose within specific periods. We utilized both qualitative methods, such as practitioner surveys and expert assessments, and quantitative methods, such as data collection from grant platforms. This mixed-method approach ensures a holistic evaluation of grant programs.

We began by creating a detailed research plan and establishing a theoretical framework. Then, we developed a scoring matrix to construct the GMI and collected data from various grant programs. This data was processed into indicators, which were used to compute the GMI. We refined this preliminary analysis through stakeholder feedback to ensure accuracy and relevance.

By dividing the research responsibilities between two researchers, we leveraged our combined expertise in mixed-methods research. This collaboration allowed us to cross-verify results and ensure a balanced, objective analysis of the data.

Given the required threshold maturity for effective scoring, as it is present in the GTMI, the construction of the GMI only includes Web3 grant programs operated by entities consisting of both a corporate entity, such as a foundation, and potentially more programmatic entities like DAOs.

The divergence among Web3 grant programs requires a differentiated analysis that cannot adopt a one-size-fits-all approach, especially in areas of funding that target different verticals and overall program goals. Our focus was on a small group of Layer 2 protocol grants that concentrate on ecosystem growth, adoption, liquidity, and development (dApps). Working with these pools allows us to create a baseline framework to test against and assess.

1. Ecosystem Growth:

   • Optimism (Growth Experiments Grant Program, Season 5): Managed by the Growth Experiments Sub Committee, this program's goal is to maximize the number of users interacting with applications that further a specified intent defined by the Optimism Collective.

   • Arbitrum (Short Term Incentive Program): An experimental program to distribute 50 million ARB to active Arbitrum protocols, focusing on enhancing network growth and liquidity. Following this, more funding was provided in the form of Arbitrum STIP backfund, totaling 21.1 million ARB tokens ($23.54 million) to support 26 additional projects. These projects include Gains Network, Stargate Finance, Synapse, and Wormhole.

   • Taiko Grants: Designed to support the development of the Taiko ecosystem by funding projects that enhance scalability, reduce Ethereum transaction costs, and promote network adoption. They also serve as a means to generate liquidity and distribute the anticipated project token.

   • Mantle Grants: Distributed by a third-party service provider with significant organizational overlap with Mantle entities. This program funds consumer applications in SocialFi, Gaming, and DeFi, focusing on increasing user engagement and network activity.

• Optimism (Season 5): Selected for its comprehensive data availability, the grant program emphasizes long-term incentives to drive user interaction and application engagement.

• Arbitrum: Focuses on liquidity enhancement and network growth through a substantial allocation of ARB tokens to active protocols. The backfunding initiative further underscores its commitment to supporting impactful projects that initially missed out on funding.

• Taiko: Aims to bolster technology development, community engagement, and research initiatives without an initially launched token or Mainnet.

• Mantle: Prioritizes solutions that enhance layer two capabilities and drive ecosystem growth through targeted funding of applications and infrastructure projects.

We understood that to ensure the validity of not only the data but also the output, we needed a small test case with commonalities in goals, processes, and networks. Therefore, we decided to focus on the area of ecosystem growth to establish a foundation, ensuring that the cases had similar foundations to build upon. This approach allowed us to create a baseline framework to test against and assess, leading to more accurate and relevant insights.

We focused on several critical areas contributing to the maturity of Web3 grant programs, including:

• Clarity of objectives

• Organizational structure

• Governance processes

• Effectiveness and impact

• Transparency and accountability

• Community engagement

By examining these dimensions, we aimed to identify strengths, weaknesses, and opportunities for improvement in grant programs.

Integrating the GMI into grant programs offers numerous benefits:

• Efficiency: Identifies and eliminates redundant processes.

• Transparency: Enhances transparency through clear metrics and standardized reporting.

• Strategic Decision-Making: Supports better strategic decision-making with data-driven insights.

• Impact Showcasing: Showcases the tangible impact of grant programs, fostering accountability and promoting best practices across the ecosystem.

Our research methodology follows a structured process:

1. Creation of Research Plan: Establishing the scope and objectives of the study.

2. Theoretical Framework: Building a foundation based on existing literature and concepts.

3. Scoring Matrix Development: Designing a tool to evaluate grant programs.

4. GMI Construction: Combining qualitative and quantitative data to create the index.

5. Data Collection and Analysis: Gathering and processing data from various grant platforms.

6. Stakeholder Feedback: Refining the GMI through expert and practitioner input.

7. Dissemination: Sharing our findings and the benefits of the GMI with the broader community.

Stay tuned for our next article, where we will delve deeper into the design behind the GMI.

The Persistent Challenge

In both traditional and Web3 grant systems, understanding who is providing funding, where it went, and what impact it produced remains a persistent challenge. Traditional grants have long struggled with issues like unclear objectives, unstructured processes, and a lack of standardized evaluation methods. Mechanisms like the World Bank's Government Technology Maturity Index (GTMI) have been implemented to improve the transparency and effectiveness of publicly funded research and development (R&D) projects. These systems face challenges that are surprisingly similar to those encountered by Web3 grants.

The Problem with Web3 Grants

Web3 grants are a relatively new phenomenon and lack a systematic framework for comparing and evaluating their outcomes. Despite some efforts to create frameworks for decentralized science (DeSci) and research on Web3 governance, there is scant literature on Web3 grants across various disciplines. This lack of exploratory and systematic literature presents significant challenges to Web3 grantors, grant operators at decentralized autonomous organizations (DAOs), as well as grantees, who can only rely on industry knowledge and informal guides.

Without a theoretical framework, the structure and benefits of decentralized grant programs cannot be reliably measured or tracked. This poses a problem for evaluating the utility of programs for allocating funding through distributed systems. Although decentralized networks are perceived to be more open and flexible than hierarchical and centralized structures, their inaccessibility to outsiders creates significant information asymmetries. If no systematic information is available for grant programs, the supposedly open processes become much more closed than they are believed to be.

Parallels with Traditional Grants

Traditional grants are defined as financial donations awarded by the contracting authority to the grant beneficiary, either tied to a specific action or unrestricted for the objectives of a specific organization. Similarly, Web3 grants often take the form of financial incentives provided by blockchain projects to encourage development, research, and community building on their platforms.

Grants in the Web3 space represent a substantial portion of ongoing investment, potentially amounting to hundreds of millions of dollars annually. However, many of these programs suffer from a lack of clear goals, consistency, and effective measurement tools to assess the impact and efficacy of their funding. This oversight often results in inefficiently allocated funds and significant scaling challenges. Industry reports consistently highlight these critical gaps, revealing issues such as inconsistent accounting practices, operational inefficiencies, and inadequate support and retention of grantees.

Learning from Traditional Models

It is possible to transfer knowledge from conventional grant programs to Web3 grants, as both domains share similarities in processes and face challenges such as lack of consistency, accounting transparency, and reporting. Research on the impact and efficacy of grant programs has led to various frameworks developed to optimize, measure, and track their outcomes. Examples include The Global Fund’s Monitoring and Evaluation Framework and Canada's Performance Measurement Framework, which apply key performance indicators and strategic evaluations to ensure effective fund utilization and impact assessment.

While these examples highlight potential improvements for grant management practices, the absence of formal, reliable, and complete data for Web3 grant programs makes it difficult to apply these traditional models effectively. The intricate relationship between DAOs and grants mirrors traditional challenges in treasury management and public finance. Concerns about nepotism and accountability in Web3 grants highlight the need for a robust tool like the GMI to hold protocol leaders accountable and ensure transparent, efficient grant management.

About Us

Feems has extensive experience in the DAO ecosystem, particularly in grants and governance, having co-founded the DAO Gov Collective ( a community of over 250+ members) . She has contributed to ecosystems such as Interest Protocol, Arbitrum DAO, and Gitcoin and is a member of the MetaGov Grant Innovation Lab and a Stewerd of Hats Protocol. Feems holds an MSc in Lobbying and Public Affairs and has experience working in government and global affairs.

Ben started his career analyzing the implications of EU cryptocurrency regulation and contributed to one of the first Ethereum-based DID methods. His excitement for Web3 infrastructure and procurement led him to join RaidGuild and eventually the MetaGov Grant Innovation Lab as the Consortium Lead of WID3+, where he focuses on crypto-economic procurement while pursuing his PhD at the University of Malta.

The team combines practical and theoretical expertise to develop the GMI, ensuring it serves grant-giving professionals as a robust tool for evaluating and improving their Web3 grant programs.

Guiding Questions The GMI research is guided by two key questions:

1. What indicators sufficiently describe the structure of Web3 grant programs?

2. How are the outcomes of Web3 grant programs best described?

Why a Tool Like GMI is Essential The development of the GMI addresses the need for a systematic approach to evaluate and improve Web3 grant programs. Key benefits include:

• Transparency: Providing a clear framework for evaluation enhances the transparency of fund allocation and utilization.

• Accountability: Highlighting areas of success and identifying opportunities for improvement.

• Efficiency: Standardized metrics streamline grant management processes, reducing inefficiencies.

• Benchmarking: Enabling comparisons across different grant programs to identify and adopt best practices.

• Stakeholder Engagement: Facilitating communication with stakeholders by providing a clear picture of grant program performance and impact.

Practical Applications and Future Impact The GMI is designed not just as a research project but as a practical tool to bring clarity and structure to Web3 grants. By validating different indicators and use cases through ongoing research, the GMI ensures that it remains relevant and comprehensive. Our initial focus on Layer 2 solutions within the DeFi ecosystem sets the stage for broader applicability, ultimately benefiting the entire Web3 community.

This project, inspired the World Bank Group’s GTMI, introduces an exploratory weighted composite index constructed using mixed methods. It aims to fill a critical gap by establishing a baseline and benchmark for Web3 grant program maturity and identifying areas for improvement. The GMI will help grant programs show their impact, serving as a reputation tool for token holders, donors, and the community.